Discuss and evaluate the use of the payback period as an investment criterion.

Q: You have just taken out a $16,000 car loan with a 8% APR, compounded monthly. The loan is for five y...

A: Payment per period can be calculated using PMT function in excel.   PMT(rate, nper, pv, [fv], [type]...

Q: High-end airlines compete directly with other high-end airlines. When it comes to pricing, competito...

A: In a competitive environment, the companies will try to outdo each other on prices and services in o...

Q: Compute the Terminal cash flow. Compute the FCF for years 1 through 5 Compute the project’s NPV and ...

A: Companies only invest in positive NPV projects. NPV method is a method of project appraisal. It disc...

Q: 2. A financial manager must choose between three alternative investments. Each asset is expected to ...

A: Wealth maximization is the concept of maximizing the value of the shares held by the shareholder, to...

Q: BUG's stock price S is $108.67 today. It pays dividend of $0.5 after two months an- $0.6 after five ...

A: The forward price of forward contract will includes the value of dividends and future value of stock...

Q: Mr Lim must pay RM 250 every month for 24 months to settle a loan at 10% compounded monthly. Find ...

A: Monthly payment (P) = RM 250 Number of monthly payments (n) = 24 Interest rate = 10% Monthly interes...

Q: May deposits PhP 20,000 into a fund at the beginning of nd of 15 years, she makes an additional depo...

A: The present value of the future payments to be received will give the the future value of payments r...

Q: erm in years: 2 3 4. Cate: 1.8% 2.25% 2.30% 2.66% 3.13% he table above shows the interest rates avai...

A: Present value of cash flow is the value of cash flow that is equivalent to the value today consideri...

Q: Compute for the Effective Interest Rate Payment Period = Monthly   10% Compounded Yearly = Blank 1...

A: An effective rate of interest is defined as the loan's rate of interest or financial product, which ...

Q: What is the explanatory variable? Select one: a. birth weight O b. gestational period O c. babies O ...

A: An explanatory is an independent variable which is used to find out the change caused in the respons...

Q: SME Balance Sheet 2021 2020 Assets (in millions) Cash 85.960 56.460 Receivables 89.560 80.6...

A: Price to earning ratio measures the price of stock relative to its earning. It cam be calculated Pri...

Q: Based on the preceding information, your calculations, and your assumptions, which of the following ...

A: The following are the statements that will be included: (B) Cute camel woodcraft firm's ability to m...

Q: A business loan of 800,000 is to be repaid in full after 2 year. What is the amount to be paid if th...

A: Loan = 800,000 N = 2 years Effective rate of interest = 8%    

Q: SME Balance Sheet 2021 2020 Assets (in millions) Cash 85.960 56.460 Receivables 89.560 80.6...

A: The question is related to the Ratio Analysis. The Current Ratio is a short term solvency ratio and ...

Q: Jacques has just been notified that the combined principal and interest on an amount he borrowed 19 ...

A: Loans carry the interest rate so value of loans increases with time and interest.

Q: Balance sheet Assets (in KD) Liabilities (in KD) Cash 53627 Accounts payable 80000 Accounts receivab...

A: Solution:- Current ratio measures the liquidity of the company ie. the ratio of current assets to cu...

Q: Ethan wants to set up a fund for his son's education such that he could withdraw $2,982.00 at the be...

A: Quarterly withdrawal (P) = $2982.00 Period = 6 Years Number of quarterly periods (n) = 6*4 = 24 Inte...

Q: Short term financing includes which of the following:

A: A company needs financial capital to carry out its various projects and thereby by increase the weal...

Q: Give at least five (5) similarities between chattel mortgage and pledge

A: Mortgages are loans that are used to buy houses and other types of real estate. The house serves as ...

Q: Amiel paid P1,400 interest for his loan from a cooperative that charges simple interest rate of 3.5%...

A: Answer -  Based on the given conditions, formulate: 1400=3.5%×x 0.035x=1400  Step 1 - Divide both si...

Q: Find the simple interest of P210,000 for 3 years at 5 %.

A: Simple interest is a quick and easy way to calculate a loan's interest charge. The daily interest ra...

Q: 1. The formula being used to get the working capital is - a. Working Capital= Current Assets/Current...

A: Solution 1:- As per Bartleby honor code, if multiple questions are posted, the expert is required on...

Q: You decided to purchase a new appliance by borrowing $1,500 using Home Credit Product Loan which cha...

A: Loan amount (PV) = $1500 Interest rate = 18% Monthly interest rate (r) = 18%/12 = 1.50% Period = 3 Y...

Q: Draw the payoff of a call option on an Apple stock with a current price of $90, a strike price of $1...

A: Given, The current stock price is $90 Strike price is $110 Cost of option is $10.  

Q: Calculate the Karl Pearson's coefficient of correlation of the short-term ocillations for the indice...

A: A measure of relationship between two variables is called coefficient of correlation. It gives a mea...

Q: 3. If banks heeded Shakespeare's admonition “Neither a borrower nor a lender be", what would happen ...

A: If banks had noted Shakespeare's rebuke, the circular flow of the economy will become much smaller. ...

Q: Compare the machines below using present worth analysis be selected w year ich one should

A: The present worth of a project can be defined as net benefit of a project in current terms. It is ca...

Q: 2. An elective project is currently under review. An initial investment of $116,000 would be necessa...

A: In today's world, it has become crucial for managers to choose the best alternative from a set of al...

Q: Garrick is purchasing equipment for his job as a builder. The equipment costs $1000 and he wants to ...

A: The loan which is discharged by making installment payments consist of two components as interest mo...

Q: Yesenia purchased a car for $21,394. She obtained a 6 year term loan at an interest rate of 6%. She ...

A: A loan is an agreement between two parties where one party borrows money from the other party with t...

Q: Find the interest rate for a $9000 deposit accumulating to $11,517.62, compounded quarterly for 9 ye...

A: Interest rate (r) = n[(A/P)1/nt - 1] Where, Number of compounding in a year (n) = 4 Years (t) = 9 Ac...

Q: 4. Cash flows "Cash Is King" for all businesses You can determine a company's cash situation by anal...

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...

Q: Pina Co. has the following defıned benefit pension plan balances on January 1, 2020. Projected benef...

A: Given information is represented in the form of a table below,

Q: C Companv has a $1.000 par value bond that currentlv sells tor $850. The coupon rate of the bond is...

A: Required rate of return on bond is rate of return realized on bond by holding the bond on the maturi...

Q: The Quick-time Company stock is currently selling for $32. There is a put option on the stock rith a...

A: Stock Price 32.00 Strike Price 29.00 Variance 0.0625 Risk Free Rate 0.02 Time Period 6 Month...

Q: 14. A man made ten annual end-of-year purchases of P1,000 common stock. At the end of 10th year he s...

A: Yield to maturity can be calculated by following function in excel =RATE (nper, pmt, pv, [fv], [typ...

Q: Q1- State five financial sanctions that have been imposed on Russia by European countries and USA.

A: Sanction is a financial term which is used in a situation where one country or a group of countries ...

Q: When should P24,700 be due if its present value is P22,900 at a simple discount rate of 8 3⁄4%?

A: Solution:- Present value means value in terms of today, ie, without the effect of interest in it, bu...

Q: Regarding MM 1958 proposition, a firm's value is not influenced by O interest rate paid on debt. req...

A: Modigliani-Miller's approach is considered to be one of the most important theorems in corporate fin...

Q: You just leased a Honda Civic that sells for $25,350. The terms of your lease require you to make 60...

A: Price of the car (P) = 25350 n = 60 months Let r = Monthly interest rate Monthly payment (M) = $310 ...

Q: Prepare a schedule for the following bond, including calculations, yearly income, end-of-year accumu...

A: Given:

Q: Suppose you find stock A with positive alpha and stock B with an equal but negative alpha. Which of ...

A: Alpha measures the return of the security as compared to the market index. It is an important term u...

Q: A corporation must decide whether to introduce a new product line. The new product will have startup...

A: NPV is the difference between present value of cash inflows and initial investment. NPV =PV of cash ...

Q: If Shannon Pegnim had started her IRA at age 35 rather than age 14, how big of an annual contributio...

A: IRA refers to the individual retirement account of an individual which is used by the individual to ...

Q: Company AMP wants to determine the net present value of one of its systems when cost of capital is 1...

A: The net present value of a project can be defined as the current value of positive and negative cash...

Q: Capital structure of a company is more appropriately calculated using the: book value of debt and eq...

A: Capital structure is basically a ratio of Debt and equity, a capital structure is optimal when it ha...

Q: larger will the value of an RRSP

A: RRSP stands for Retirement saving plan refers to the financial plan which is used for saving and inv...

Q: The purpose of the __________ is to provide information to management and ownership about the financ...

A: Solution:- Income statement contains the list of expenditure incurred as well as the revenue generat...

Q: Would be necessary for equipment. The annual revenues and expenses are expected to be $38,000 and $1...

A: B/C ratio is ratio of present value of benefits to initial investment and if B/C B/C ratio is more t...

Q: Suppose stock returns have a 2-factor structure. You observe a broad stock market portfolio A which...

A: Portfolio A return (Ra) = 7.4% Portfolio B return (Rb) = 10.6% Beta of first factor for A (A1) = 0.5...